1 How and why does tax legislation exist?

Income tax was introduced in Canada in 1917 as a temporary measure to fund the 1st World War.  This temporary measure has proven to be remarkably resilient and has stuck around for more than a century.    During this time tax rules have grown from 11 pages in 1917 to thousands of pages today.

In the 2022-2023 fiscal year, the Canadian government raised $448 billion dollars in revenue. Of this amount approximately 46% came from individual income tax, 21% from corporate taxation, 10% from GST/HST and 6% from the employment insurance premiums.  Personal and corporate taxation play a huge role in funding schools, the Canadian military our national healthcare systems etc.

Political Context and Taxation:

Taxation policies are often driven by the political climate of the day. For example, left-leaning governments may implement wealth taxes on high-net-worth individuals or raise taxes on higher-income earners to address wealth inequality. In contrast, right-leaning governments may focus on reducing taxes for corporations and high-income earners, believing this stimulates job creation and economic growth.

In 2024, discussions around potential wealth taxes and carbon tax reforms remain key issues, highlighting the ongoing political influence on taxation policy.

There is no immutable structure for taxation; it evolves with political priorities. When you vote, it’s important to consider the tax policies of the various parties, as they have a direct impact on public services and economic equality.

October 2024